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Bankruptcy in Brief

             a service of the Moran Law Group

Will I get a discharge?

Almost assuredly.  While getting a discharge now requires the debtor to jump through hoops to avoid dismissal and get to discharge, the honest and attentive debtor will get a discharge.

Who decides?

The bankruptcy judge is the only one who can decide that you don't get a discharge.  The trustee or a creditor can file an adversary proceeding asking the court to deny discharge, but the trustee doesn't decide the question, the judge does.

What facts prevent discharge?

Put most broadly, only a recent bankruptcy discharge or hiding assets or lying in connection with the bankruptcy case support denying discharge.  It is a very infrequent occurrence.  The full list of disqualifying acts is found in 727. Under the new bankruptcy law, a bankruptcy case might be closed without a discharge if the debtor fails to complete the required financial management course.

Dischargeability challenge unrelated

A challenge by one creditor to the discharge of its debt under 523 does not prevent entry of  the discharge of all other dischargeable debts.  A non dischargeability action has its own time line and is decided either by settlement or trial.

Different from denial of discharge is a dismissal of the case for "abuse" pursuant to 707.  A case could be dismissed, not because the debtor has behaved improperly but because the debtor's income is held to be sufficient to permit some repayment of their debts.  More on abuse.

If a debtor is denied a discharge under 727, the debts existing at the time of the filing are forever non dischargeable in bankruptcy.  If a case is dismissed for abuse, there is no bar to a later case to discharge the debts if the law or the circumstances are different.

After the 341 meeting

In most no asset cases, the trustee's work is concluded at the 341 meeting.  He does not monitor the debtor's post petition income or assets or perform any other "tests" of the debtor's entitlement to a discharge.

What if the trustee is selling my property?

A debtor's right to a discharge proceeds on a timeline separate from the trustee's mission to gather up non exempt assets from which creditors can be paid.  The system is set up so that the debtor will know within a few months if there is a challenge to the right to a discharge.  The trustee can go on administering the assets long after the debtor has a discharge.

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